How Do I Pay Off Debt in a Short Time?

by Maggie McCormick

Paying only the minimum balance on your debt can mean that you'll take years to pay it off, often at a huge cost to you. It may seem like you're just barely making ends meet, but if you make a serious commitment and work hard at it, you can pay off your debt in a short period of time. Unfortunately, there are no short cuts. Paying off your debt quickly means that you're going to have to cut back. The payoff, however, is worth it.

Set financial goals and make a serious commitment to reach them. Choose a goal date when you want to have all of your debts paid off. Determine how much you'll have to pay towards your debt each month in order to meet your goal.

Differentiate between needs and wants. If you're deep in debt, you're probably making unnecessary purchases. Your needs are things that are essential to your survival, but your wants would just be nice to have. For example, you need to eat, but you want to eat at a gourmet restaurant rather than cook at home.

Calculate your monthly expenses. You can do this by saving all of your receipts and placing the expenses into different categories, like food, entertainment, transportation and utilities.

Eliminate the "wants" from your expenses. Cutting out this unnecessary spending will free up money that you can put towards debt.

Find alternatives for your high-cost habits. Being miserly isn't for everybody. You may feel a sense of loss when you can't spend money on your favorite things. Look for ways that you can get the same thing without spending money. For example, if you used to enjoy purchasing a new book every week, stop by the library instead.

Turn your free time into extra cash. Pick up some freelance jobs or a part-time job to earn extra money during the times when you would normally just be watching TV.

Shake out your couch cushions. As you get closer and closer to reaching your debt-free goal, you'll want to find more ways that you can pay down your debt. Try looking for free money around your house: You might find money in couch cushions or the pockets of your old coats. Alternatively, you probably have a lot of things around the house that you could sell for extra money.

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About the Author

Maggie McCormick is a freelance writer. She lived in Japan for three years teaching preschool to young children and currently lives in Honolulu with her family. She received a B.A. in women's studies from Wellesley College.